$83.8 Billion U.S. Trade Deficit Made in China

Stephanie Salter

When Charles Kernaghan heard that the Chinese had detained a U.S. Navy
spy plane, "I thought we should send Wal-Mart and Nike over there to get
the crew out...."

Kernaghan is director of the National Labor Committee, an international
workers rights organization based in New York. More than 15 years
of monitoring the labor practices of United States-subsidized factories
in Latin America and Asia have taught him where the real power lies in
U.S.-Chinese relations:

Not in any embassy or government office, but behind the dollar signs of
trade.

Like many folks who pay attention to the underbelly of the global
economy, Kernaghan couldnt help but marvel at the irony of a story
that broke last week, just before China released the 24 Navy crew
members. According to a vice president for Kmart, the spy plane incident
had inspired a deluge of messages at the chains Troy, Michigan
headquarters from customers demanding that Kmart "quit doing business in
China."

Said the executive, Dale Apley, in the New York Times: "Theyre not
going to buy things made there anymore."

If regular customers of Kmart, Wal-Mart and other retail giants had an
inkling of reality, theyd know that a boycott of China would
fairly clear the shelves of their favorite stores. Wal-Mart alone is the
largest importer of Chinese-manufactured goods in the world; it
contracts with thousands of factories there. For Kohls Department
Stores, Inc., a 338-store, Wisconsin-based chain, China is the main
country of origin for goods.

"All the big U.S. companies are in there, feeding at the well of the
Chinese workers 20-cent-an-hour wages and total lack of rights,"
said Kernaghan. "That plane going down really gave the American people a
wake-up call about how the Chinese government operates. For years, our
multinational corporations have run cover for this vicious regime."

How much cover?

Sixty-two percent of all shoes and sneakers imported to the United
States are made in China. So are 83 percent of all toys and sporting
goods, 54 percent of all leather products, 76 percent of all umbrellas,
30 percent of all furniture, and one in four caps and hats.

"This is something no one is talking about around U.S.-China relations
 the enormous trade deficit," said Kernaghan. "Last year, the
United States exported $16.3 billion worth of goods to China, but we
took in $100.1 billion from them. While Europe and Japan run trade
surpluses with China, China accounts for almost one-quarter of our
worldwide trade deficit."

In 1999, the United States took in 42 percent of all Chinese exports.
And the imbalance is only growing. In January, the trade deficit between
us and them ballooned 19.3 percent. "Thats $7.2 billion in a
month!" said Kernaghan.

Meanwhile, our investment in China is increasing: in 2000, nearly half
of all direct foreign investment in China -- $40 billion  came
from U.S. firms. This past January alone, we sank $2.2 billion there. In
other words, U.S. investment not only funds a repressive regime and
sweatshop labor, its helping to enlarge our trade deficit and
increase the number of manufacturing jobs lost here  271,000 in
the first quarter of 2001.

The Bush administration can do all the tough talking it wants on China,
said Kernaghan, but the truth is: "We dont want to threaten the
trade relationship. Look at the message that was sent by the U.S.
Armys black berets being made in China and Burma. You want another
irony? The island where the plane went down? Hainan? A U.S. company,
Loral, is building a radar system there  for the Chinese
government."